10-year-old wire cartel case settled, millions in penalties

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After a full decade and several legal challenges – including in the Supreme Court of Appeal – the Competition Tribunal this week approved settlement agreements between the Competition Commission and two wire products manufacturers accused of cartel conduct.

One settlement included over R4m in penalties and the other over R5m.

The case, which dated back to 2009, had impacted numerous other companies dependent on the affected products, including major players in the agriculture and mining industries, such as Harmony Gold.

Wireforce Steelbar and Hendok admitted to being part of a cartel that fixed the prices of nails, wire and wire-related products, the Tribunal said in a statement on Thursday. The companies agreed to pay penalties of R4 319 951.22 and R5 001 364.34 respectively over a five-year period.

The settlement agreements emanated from a Commission case against wire and steel manufacturer Cape Gate and several others. Cape Gate settled with the Commission in 2018 and admitted to price fixing, dividing markets and collusive tendering.

It was fined R40m and agreed to cooperate with the Commission in its ongoing prosecution of the matter, the Tribunal said.

Several other wire and wire products manufacturers – including Allens Mescho, Wireforce Steelbar, Hendok, Galvwire, Independent Galvanising and Meshrite – had also been accused of price fixing.

Although Wireforce Steelbar and Hendok are currently dormant, the Tribunal said, they earlier provided the Commission with a suretyship deal relating to the payment of the settlements.

"Their legal representative has subsequently confirmed that the capital amount for the penalties has been deposited into, and secured in, a Trust Account," it added.

Compiled by Marelise van der Merwe. This article was amended at 17:17 on 19 September with updated information from the Competition Commission regarding the penalty paid by Hendok. 

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